Illinois Used Car Sales Tax Law

There is also between a 0.25% and 0.75% when it comes to county tax.

Illinois used car sales tax law. Sales taxes in illinois are calculated before rebates are applied, so the buyer who pays $9,500 after a $2,500 rebate will still pay sales tax on the full $12,000. Use the use tax rate table in the tax rate database to determine your tax liability. Illinois tax on new and used vehicles is generally 6.25% but can vary by location. The tax is imposed on motor vehicles purchased (or acquired by gift or transfer) from another individual or private party.

Applying illinois’ average state and local sales tax rate of 8.74%, the sales tax on this deal is. But one difference is that used motor vehicle dealers are required to issue extra paperwork in various situations, such as disclosing the rebuilt status of a vehicle. In addition to the purchase price of the car, your sales contract may include tax and title fees, as well as a service or documentary fee. Most requirements for new and used motor vehicle dealers are similar.

Additional information on these acts is contained in the illinois vehicle code. Number 2200159 illinois private party vehicle use tax is based on the purchase price (or fair market value) of the motor vehicle, with exceptions noted on the right ( i.e. The illinois department of revenue has commented that it has observed problems with the way rebates are being reported on some sales tax returns submitted by new car dealers. In addition to state and county tax, the city of chicago has a 1.25% sales tax.

Illinois law permits dealers to add a fee for processing related documents or conducting other services needed to close the sale on the vehicle, but these fees cannot exceed $150. Most counties in illinois have a 6.5 percent sales tax rate, but cook, dupage, kane, lake, mchenry, will, st. For vehicles that are being rented or leased, see see taxation of leases and rentals. Clair and madison counties have different sales tax rates.

Cost of buying a car in illinois. 1, that sales tax would jump to $2,312.50, an increase of. Illinois law allows auto sales contracts to use a balloon payment, as long as it is stated in the contract. The average sales tax on this transaction would be roughly $1,311.

See the chart below for more. Joe rizza ford wants to help illinois residents prepare for this situation and provide helpful tips on how to act before the changes go into effect on january 1, 2020. In 2019, you would only pay sales tax on the $15,000 difference. The state sales tax on vehicles is 6.25% but local taxes are added as well.

Under senate bill 690, signed june 28 by gov. For example, you are an illinois resident looking to purchase a new vehicle at a $35,000 sale price and your car is valued at $20,000. Illinois collects a 7.25% state sales tax rate on the purchase of all vehicles. Illinois has a statewide sales tax rate of 6.25%, which has been in place since 1933.

That means trading in a $30,000 car for one worth $60,000 will cost the customer an extra $1,200 in additional sales taxes. The vehicle use tax is the same rate as the sales tax. Combining state and local taxes this is around 8.75%. Under new law, illinois dealers must offer implied warranty on used cars march 10, 2017 an illinois law that takes effect july 1 will require dealers to extend an implied warranty on most used vehicles for 15 days or 500 miles, whichever occurs first.

New and used vehicle dealers in illinois are required to charge a vehicle use tax on most vehicle sales. The maximum local tax rate allowed by illinois law is 4.75%. If you trade in a car worth $20,000 and buy an suv worth $35,000, in chicago the sales tax currently would come to $1,425. These changes redefine the selling price subject to sales and use taxes for sales and purchases of motor vehicles when a customer trades in a first division motor vehicle.